The Need for More Spectrum Auctions

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

May 15, 2015 - 16:31 — Deborah Collier

A May 11, 2015 report from the Brattle Group estimates the value of the 645.5 MHz of licensed spectrum currently in use at almost $500 billion. Beyond the monetary value of this spectrum are the services provided to consumers using licensed spectrum through their mobile devices. According to the report, economists have estimated that the total social benefits achieved from using licensed spectrum are at least 10 to 20 times the direct economic value of the spectrum itself.

According to an April 1, 2015 article from Pew Research Center report, Americans are increasingly relying on their mobile devices for most, if not all, of their communications needs. The report estimates that nearly two-thirds of Americans own a Smartphone, and 19 percent use those devices to access online services and information. The Pew report also notes that 13 percent of those with an annual household income below $30,000 per year are more reliant on their Smartphones for Internet access than those earning higher incomes; with larger percentages of minorities becoming increasingly dependent on their Smartphones for their communication needs.

With the growth in the use of mobile devices, the shortage of spectrum available for mobile use continues. In January 2015, the Federal Communications Commission (FCC) completed Auction #97 for spectrum previously held by federal agencies in the AWS-3 range. After 341 rounds of bidding, the auction garnered nearly $45 billion in revenues for the federal government and providing much needed funding for the FirstNet network. The FCC is preparing for the next spectrum auction, which will involve a reverse broadcast spectrum auction, followed by repacking of the spectrum, and then an auction of that spectrum for mobile use.

As the growth in mobile use continues, the next round of spectrum auctions is necessary to provide enough spectrum to meet consumer demand. The FCC anticipates that it will begin conducting broadcaster incentive auctions by 2016, and is currently drafting rules that will govern the auctions.